Thommessen's procurement team brings you the most important news in public procurement.
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Thommessens' procurement team sends out a newsletter twice every six months, which contains the most important news within public procurements. All the news are collected in one place to make it easier for you to stay up-to-date.
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You can read selected cases from the Norwegian courts and Norwegian Complaints Board for Public Procurement ("KOFA") below.
Since the previous newsletter, a debate has spurred concerning the Supreme Court's approach in judgment HR-2023-206-A. More specifically, the debate concerns whether the approach by the Supreme Court may result in reduced compliance with the procurement legislation due to lessened incentives for tenderers to take legal action. This begs the question; does the Supreme Court's judgement entail a risk of reduced compliance with the procurement legislation? An article about this by Siri Teigum and Wenche Sædal, both Partners at Thommessen, is written in Rett24.
A new initiative aimed at increasing knowledge and competence has been launched by Thommessen and Anbud365, called the "Purchasing Forum for the Utilities Sector". The forum will be a meeting place with a focus on knowledge sharing, professional discussions and networking. As a participant, you will gain new knowledge and inspiration from skilled speakers, the opportunity to exchange experiences with others in the same industry, and participate in professional discussions. The first meeting will be held in April. You can read more about the forum and submit an application to participate by 24 February here.
SEMINAR ON DISPUTES IN PUBLIC PROCUREMENTS
Any conflicts during a procurement process can be pursued by a tenderer in the form of a complaint to the contracting authority, a complaint to KOFA, or a petition for interim measures and a claim for damages. The choice of method depends on the case and ultimate aim. In addition, there are several steps one can take to prevent a conflict from becoming a dispute.
In collaboration with Anbud365, Thommessen invites you to a practical introduction to dispute resolution processes and conflict mitigation measures - both for contracting authorities and for suppliers. You can flow the seminar by participating physically at Thommessen's premises in Oslo, or digitally by Teams.
Read more about the seminar and register here.
THOMMESSEN IS HIRING
We want to strengthen our public procurement and competition law team by adding further talented colleagues. We assist both suppliers and contracting authorities at all stages of the procurement process. We work on a wide range of cases and with a range businesses where we provide legal advice and assist with dispute resolution.
If this sound interesting to you or someone you know, please read more and apply here.
Partners Eivind J. Vesterkjær and Wenche Sædal.
News from the courts
HR-2023-206-A ("PERPETUUM MILJØ")
On 31 January, the Norwegian Supreme Court delivered its judgment in the case between Sørfold and Fauske municipalities and Perpetuum Miljø AS.
In 2019, the municipalities of Sørfold and Fauske published a contract notice for a competitive tendering process for a four-year framework agreement on emptying sludge from private septic systems. Two tenderers submitted tenders, namely Perpetuum and Stoklands. The tendering process was ultimately cancelled without an award the contract due to ambiguities concerning the applied form of tendering process. Subsequently, a new tendering process was conducted where Stoklands was awarded the contract.
Perpetuum brought the case before KOFA, which found, based on the submitted reasons, that the tendering process has been cancelled without reasonable ground.
Perpetuum then claimed expectation damages for loss of profit (positive contractual interest). The damages claim was upheld in the appeal court, with a dissenting opinion. The municipalities rejected the claim on the ground that it was correct in cancelling the first tendering process. The municipalities submitted a new reason for cancellation of the tendering process, namely ambiguities in the price form used in the tendering process.
The Supreme Court asserted that an expectation of obtaining a contract that cannot legally be entered into does not give a right to damages. As the Court of Appeal had asserted the opposite, there was an error in the application of the law.
On 3 November 2022, the Eidsivating Court of Appeal ruled in the case between Gjøvik municipality and Syljuåsen AS. In the district court, Gjøvik municipality was sentenced to pay Syljuåsen expectation damages for loss of profit as a result of a failure to reject the tenderer who was awarded the contract. The Court of Appeal upheld the district court's judgment and concluded that Gjøvik municipality, contrary to the procurement legislation, had allowed the successful tenderer to fulfil the selection criteria after the tender deadline, and that it should therefore have been rejected. According to the Court of Appeal, this was to be considered a "sufficiently qualified breach" cf. HR-2019-1801-A ("Fosen-linjen"), and Gjøvik municipality was ordered to pay Syljuåsen expectation damages for loss of profit.
Selected cases from KOFA
KOFA has recently issued a new decision concerning a restriction on the number of pages in a tender. The complainant stated that Alta municipality had broken the law by not enforcing the limit on the number of pages to maximum two A4 pages for the selected tenderer's response to the award criterion "Understanding of project". Firstly. KOFA referred to its previous practice, where it is assumed that a tenderer who exceeds the restriction on page numbers may have had a greater opportunity to highlight the added value in their offer, compared to other tenderers. The contracting authority must therefore handle any excess of the restriction on page numbers in a responsible manner.
The contracting authority could document that they had chosen to disregard information about the project organisation that did not appear within the two pages. Thus, KOFA came to the conclusion that the contracting authority was not in breach. The decision shows the importance for contracting authorities to adhere to the requirements laid down in the tender document. In addition, it shows that KOFA has a pragmatic approach in cases where the contracting authority has been conscious on how it handles page number restrictions.
KOFA 2022/291 AND 290: FAUSKE AND SORTLAND MUNICIPALITIES
Samordna Innkjøp in Salten made illegal direct purchases in connection with the procurement of IT operational services and associated equipment. The tendering process was conducted as a restricted procedure for a framework agreement with one supplier in 2015 and was conducted on behalf of several municipalities through a central purchasing body (Samordna Innkjøp in Salten). The procurement has previously been dealt with in decision KOFA2018/568.
The complainant stated that the respondent had made illegal direct purchases by a call-of order of office equipment that could not be anchored in the framework agreement.
KOFA referred to the 2018 case where previously concluded that calling off office equipment was to be considered an illegal direct procurement. Furthermore, KOFA pointed out that the contracting authority is responsible for complying with the legislation, even when the procurement is carried out by a third party.
Nevertheless, Fauske and Sortland municipalities were not fined due to the special circumstances of the case. KOFA pointed to the fact that the municipalities had only to a limited extent been involved in the procurement process, and that the host municipality for the central purchasing body had already been fined for the illegal direct procurement.
The decision can be read in its entirety here.
KOFA 2022/1670: SULDAL MUNICIPALITY
In September 2022, Suldal Municipality published a contract notice for an open procedure for the procurement of a new street sweeper. It was clear from the tender document that the evaluation under the award criterion "Quality" would be based on the tenderers filling in the comment sections in the contract specifications, and that failure to fill it in could lead to rejection. If the tenderer wanted to use an appendix to describe the fulfilment of the specifications, a reference to the relevant appendix had to be included in the comment section.
KOFA found that the contracting authority had not acted consistently in the evaluation of the tenders in regards to where the contract specification's comment section had not been filled in properly. In some cases, the municipality had strictly adhered to the tenderer's description in the comment sections, while in other cases they emphasised information that appeared in other appendices in the tender - without the tenderer having referred to these. Furthermore, the contracting authority had given maximum points to the successful tenderer under the requirement of colour of the sweeper, even though it had offered a different colour than the one requested in the contract specification.
Based on this, KOFA came to the conclusion that the contracting authority's evaluation of the quality criterion as a whole was contrary to the requirements of equal treatment and predictability. In addition, in the evaluation, the contracting authority had not stated how it had linked the contract specification to the various sub-criteria under the criterion quality, which constituted a breach of the requirement for verifiability.
Read the full decision here.
Thommessen's public procurement team has long and extensive experience. We assist contracting authorities in designing procurement strategies, preparing tender documents, as well as planning and carrying out entire procurement processes, including the handling of access to document requests and complaints. On the supplier side, we assist with reviewing the procurement documents, the design of tenders and negotiation strategies, as well as assessing applicable grounds for appealing rejection or award decisions.
Feel free to contact us if you have any questions or need assistance!